We’ve recently invested in Simbulus the makers of Woot Math. Located in Boulder, CO, the company is building a software application that we believe will revolutionize the way that kids learn math.
We’ve long believed that current education methodologies are archaic. The process of education seems to be one of the last markets that have resisted technological advancement. From time to time, we’ve considered whether or not we wanted to pursue an education investment theme, although to date, we have not made that decision.
That being said, we are all highly active in education. Ryan has sat on the board of his son’s school. Seth has three grade-school aged children and with them has worked with a large number of apps and technologies targeted at students, parents and schools. Brad and Jason have both been adjunct professors at the University of Colorado. We all participated in the Techstars Kaplan program, which was based around education technologies. We’ve each seen the challenges up close.
Woot Math a tablet and web application that teaches kids fractions, which are broadly recognized as the gateway to algebra success. In time, they intend to move up to more advanced materials where the addressable market is over $400 million a year (math only). The cost is between $6.99 and $8.99 a student and they sell to educators – from superintendent down to individual teachers and parents.
Woot Math is unique in that it personalizes and adapts to each student and fully supports in-class out out-of-class sessions. It also provides feedback to the teacher to help them optimize their lesson plans and knowledge about particular students. Woot Math is also funded by the National Science Foundation through an SBIR grant, a great program for innovative startups.
If the company is successful in building a big business and able to move to higher complexity levels, we believe there is room to go into other competency verticals.
The company was founded by Krista Marks, Tom Fischaber, Sean Kelly, Brent Milne, and Jeff Ward. We were advisors to their last company Kerpoof that was acquired by Disney in 2008, and we’ve known Krista and Brent for many years and have always wanted to work with them.
A little over a year ago – and very shortly after AngelList announced their “syndicates” functionality – we decided rather than postulate about how AngelList Syndicates may or may not change, transform, or challenge the venture capital industry, we’d jump in with both feet. When we formed FG Angels we were the first institutional venture firm to launch a syndicate. We committed $2.5M to the effort with the intent of “making 50 investments between now and the end of 2014 in companies that list on AngelList…[investing] $50,000 of our own money in each company and the balance from our syndicate.”
Since that time we’ve invested in 42 different startups through AngelList (our first investment – OnTheGo – closed on 12/19/13, our most recent investment – Sportsy – closed last week). Our syndicate currently has 176 members and a total backing of $570k for each investment. We thought now would be a good time to reflect on how the program is going and share some of the underlying data from our experience.
Below are some of the key statistics from our year on AngelList:
Total number of investments: 42
Average syndicate investment amount per deal: $316k
Largest syndicate investment in any single deal: $785k
Total number syndicate investors (syndicate members who invested in at least one FGA deal): 116
Total number of investors (all investors who have joined FG Angels in at least one deal): 410
# of investors who have participated in at least half of FGAngels deals: 30
Most active syndicate member investment total: $905k across 41 of our 42 FG Angels deals
% of investments with a female co-founder: > 20%
Overall, FG Angels has been a good experience for us. It’s given us the ability to work with some great entrepreneurs (you can see all of the companies FG Angels has backed so far here) and to make investments in a number of seed-stage companies that we would otherwise have passed on had the program not existed (by way of comparison, Foundry Group has made investments in nine new companies in this same time period).
Going forward, our plan is to complete the 50 investments that we initially allocated for and to continue to invest in promising seed stage businesses through the FG Angels platform beyond that. We don’t have a set number of companies that we intend to target with this expansion, rather we’ll keep investing so long as we feel that the program is adding value to the portfolio and driving returns for our investors and syndicate members.
Our Investment in Mattermark
Last week we led a $6.5 million investment in Mattermark. Based in San Francisco, Mattermark’s mission is to organize the world’s business information to answer questions about the companies you want to do business with.
While there have been numerous efforts over the last 20 years to organize detailed private company data on the Internet, the end result is still lame. Classical search approaches like Google are a mess – you can get bits and pieces of the data, but it’s impossible to get what you want in one place. When you use public company data as a metaphor, it’s not surprising that Bloomberg still exists in the world of Google Finance, Yahoo Finance, MSN Money, and a continued list of non-comprehensive, relatively neglected data sets and presentation layers.
Today, the data signals about private companies are ubiquitous. But no one organizes the data effectively. When you buy a CRM system, it comes empty. Everyone re-collects similar data from a wide-variety of sources and ends up recreating the same spreadsheets to try to do data analysis. Much of the data that gets presented is in PDFs or other report formats that are not structured or searchable. When market research on private companies consists of Google searches, manual data entry by analysts, and spreadsheets to present information, there’s an opportunity.
Mattermark is going after the entire data ecosystem with a goal of making the definitive market research product for company information. The first phase of the business is to become the premier source for private company intelligence with the goal of building a fully-automated analytical infrastructure to enable data-enabled consulting.
Mattermark was originally founded in 2012 as Referly, which was a completely different company. The founders raised some money, realized they weren’t making any progress, shut down Referly, but took their remaining capital and pivoted completely to what became Mattermark. Danielle Morrill, Kevin Morrill, and Andy Sparks then launched Mattermark in mid-2013, raised additional angel rounds, and saw revenue growth each month of their subscription based product.
We initially invested in Mattermark in the fall through our FG Angels syndicate. We are psyched to now be major investors in Mattermark.
We are pleased to announce we have invested in Spare5. The company is building a software platform that allows experts to monetize their spare time via mobile device.
As our newest theme “Marketplace” evolves, we think about underserved markets that should be working together, but through lack of technology are not. We have a special interest in markets that involve some sort of remnant asset that needs monetization and that is spoiled and / or lost if not used.
The average American spends four to six hours a day on leisure, commuting or waiting activities. With over 160 million smartphones in the U.S., plus a population that checks their mobile devices over 100 times a day, there is a huge market of remnant time that exists every day. Many of these people have particular skills that would be useful for particular tasks.
Spare5 seeks to create value with this wasted time by building a software platform that matches people with particular skills (“experts”) to do discreet tasks for companies interested in a particular demographic.
For instance: only college-educated people with 3+ years work experience of “interior design” can do Porch.com tagging assignments, and only people who have followed People.com, US Weekly or reality TV shows may tag Getty Images entertainment photos. In short, Spare5 recruits and aggregates valuable cohorts of experts and sells this expertise to companies, while paying the experts and taking a cut at the same time.
The software platform helps ensure the quality of work and also learns over time how to do certain tasks, which then helps automate some of the lower level work desired by customers. Initially, the company will focus on tasks involving image tagging, video tagging, image editing, surveys and data verification.
The company was founded by Matt Bencke, Daryn Nakhuda and Patrick O’Donnell. Matt was formerly an executive at Getty Images, Microsoft and Boeing. Daryn was the technical lead at Porch and Teachstreet and held senior technical positions at Amazon. Patrick was a founder and CTO at Urbanspoon.
We are stoked to get to work with the team. Welcome!
Our Investment In Ello
We’re pleased to announce that we’ve co-led (along with Techstars’ Bullet Time Ventures and with participation from FreshTracks Capital) a Series A financing for Ello, a new and disruptive social network. Based in Burlington, Vermont and founded and run by our long time friend Paul Budnitz, Ello is basing their business on a fundamentally different premise than other social networks – specifically eschewing building a business that is reliant on third-party advertising or the selling of user data.
We’re strong supporters of the Ello team’s unique vision for the business. Along with the founders of the company, as well as their other investors, we have signed and support the Ello Charter that you see below (click on the image to open it in another window to enlarge it).
It’s important that we state this clearly, since there are bound to be people who view this financing with skepticism. Foundry Group is completely supportive of the Ello mission. We’ll either build a business that doesn’t rely on third party advertising or the selling of user data or we won’t build a business. Our belief is that there are products and features that Ello can develop that users will be willing to pay for. While the price points may be low, as part of a much larger ecosystem with millions of users, will provide an economic model for the company which supports the business and our investment.
While Ello has of late received a lot of press and attention, we’ve actually been following the company since its inception because of our relationship with Ello co-founder Paul Budnitz. Paul has a unique relationship with Foundry – he’s the only founder we’ve ever had an agreed upon term sheet with that decided not to close on our investment. This was for a business idea prior to Ello when Paul lived in Boulder. To Paul’s credit as we were in the final stages of documenting the investment he realized that several key business level items weren’t coming into place and, after consulting with us about his concerns, he decided that the timing wasn’t right for him to pursue his idea. We parted ways but remained friends as Paul moved from Boulder to Vermont, pursued his passion for bicycle design (the four of us each own some of the earliest production models of Budnitz bikes) and eventually started Ello.
So welcome Paul and team to the Foundry portfolio. We’re excited to have you as part of the family! And if you’re on Ello, please connect with us: @sether, @bfeld, @jasonmendelson, and @ryanmc.
